Obama plans expansion of overtime eligibility

President Barack Obama’s latest attempt to raise pay for low-wage workers will come through a broad expansion of overtime pay.

Obama will on Thursday direct Labor Secretary Tom Perez to raise the threshold for workers to be covered by overtime protections. The move will cover millions of employees at banks, restaurants, convenience stores and in “executive, administrative and professional” posts defined as “white collar” posts, a White House official said.

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“Due to years of neglect, one of the linchpins of the middle class, the overtime rules that establish the 40-hour workweek, have been eroded,” the official said. “As a result, millions of salaried workers have been left without the protections of overtime or sometimes even the minimum wage. For example, a convenience store manager or a fast food shift supervisor or an office worker may be expected to work 50 or 60 hours a week or more, making barely enough to keep a family out of poverty, and not receive a dime of overtime pay. It’s even possible that some of these workers make less than the minimum wage per hour.”

The White House authority to change overtime regulations is rooted in the Fair Labor Standards Act of 1938, the White House said. The Labor Department in 1975 set the pay threshold below which white collar employees were guaranteed overtime protection at $250 per week. The George W. Bush administration raised that level to $455 in 2004.

California and New York have set higher thresholds — $640 and $600 per week, which are due to rise to $800 and $675 weekly in 2016.

The White House did not say by how much Obama will direct the Labor Department to raise the federal minimum threshold. The official said Obama will merely direct Perez to “begin the process” to determine what the new standard should be and then propose a new rules to determine both the pay threshold and a federal definition of a white collar worker.

Obama’s overtime move comes in the midst of a coordinated push by the White House and congressional Democrats for a federal minimum wage increase from $7.25 to $10.10 per hour. And it comes six weeks after Obama announced he was raising the hourly minimum wage for employees of federal contractors to $10.10.

Those moves, like the effort to expand overtime, received stiff opposition from both Republicans on Capitol Hill and the business lobby.